Bitcoin price cycles

[hacknoid]

Technical analysis on Bitcoin is like technical analysis on penny stocks - worthless as the price can easily be manipulated by a single or a small group of investors, is very subject to news events, and the market is too small and immature.

Well, yes - but, the market is larger and more mature now than it has ever been, and the analysis done on it so far is based on the history of that manipulated market.  So, I would argue that if a model has applied to this point, it should be able to apply in future.  That is basically what I was getting at in the OP; I think what we are seeing are the elements of human nature being applied to a market space.  The tendencies toward greed, fear, manipulation, profit taking, etc., are what has driven the shape of the price graphs up to this point in time.  And that, together with it being such as small market, is why, for example, each time there is a dramatic price rise we see a sudden fall back to a midpoint and subsequent instability... people are taking profits, becoming scared (in some cases), and jumping on opportunities (in others).  It makes for dramatic, but very definite and noticeable, changes in price.

 And you're trying to analyse a manipulated market? By your own statement?

 DOH!!!!!!


 You can't time manipulation, the people that can manipulate do it on their own schedual when THEY feel like it.

BTW, just came across this in another thread, and it seems apropos to this argument:

... There's a great book about a stock trader from around 100 years ago. One of the pieces of advice he gives is "As I have said a thousand times, no manipulation can put stocks down and keep them down." In other words, it is possible to manipulate markets and change the price for a short time, but keeping the price at a "fake" level is much harder.

[Afrikoin]

In terms of predicting price or noticing cycles, take a look at this image highlighting what I would say are correlating events in the cycles as I described them:

[img]https://i.imgur.com/G4az2Lk.png?1[/img

Yes! Some of those areas look similar, but a few to note are:
(D) In 2011, D was already making higher highs (HH's) above the B. In Elliott wave, that was a subwave of the whole rise to $31.9099. In this case, it was a 3. In 2013, it was still part of the correction, or in the best supporting argument, a subwave of a subwave, 1 of 5. Visually, it makes no HH, so it really doesn't look similar at all.

Next, compare price of everything after the $1200 peak with the 2011/12 data you have there. Your corresponding points hit the bottom and began rising in the latter. In 2014, it continued down. This tells me that we are in a much larger cycle here that isn't really comparable to the 2010-2012 data you have without first stretching that data about 4x. I would argue that your F, G and H are more appropriately set up like this
[img]https://i.imgur.com/2Ca3IN7.png[/img

Where F and G were all of 2014 and we are still somewhere in the H. Or at best, in the I. There is also the possibility that F was the entirety of 2014 and we are in G since January this year. I don't really have an opinion on which is more likely.

RyNinDaCleM, you are trully smart! respect.

I agree with you, regarding the length of time taking longer or in other words, a larger cycle.

When i was reading OPs idea, the first thing i thought was he was right about human behaviour in herds as predictable, but also thought he was wrong in assuming it would repeat itself in the same number of days cycles. That i find, cannot happen in a case where there is growth. Growth in nature is not linear or proportional.

For example, think about children growing up, they grow at different paces at each stage of their life. Not that any growth is superior to another, but it does not take the same amount of time because at each growth level, complexity varies.

In the case of bitcoin, bitcoin today is not bitcoin of yester years - so, while growth might occur in a similar fashion, I would expect number of days to vary eg X4 or xY.

Which is why, i agree with RyNinDaCleM here when he redraws the labels to show the cycles are taking longer - similar, but longer days.

*please excuse typos. Cant be bothered

[Toxic2040]

Ok, you have my attention. Sub for updates. Thanks!

[FriendlyChemist]

Cycle moving backward ..will go below 400 now.

[Altynbekova]

Like i said in another thread, the market manipulators are not yet.
It would make no sense to think it is done now. A turbulent month is coming for all specators.

[hacknoid]

In terms of predicting price or noticing cycles, take a look at this image highlighting what I would say are correlating events in the cycles as I described them:

[img]https://i.imgur.com/G4az2Lk.png?1[/img

Yes! Some of those areas look similar, but a few to note are:
(D) In 2011, D was already making higher highs (HH's) above the B. In Elliott wave, that was a subwave of the whole rise to $31.9099. In this case, it was a 3. In 2013, it was still part of the correction, or in the best supporting argument, a subwave of a subwave, 1 of 5. Visually, it makes no HH, so it really doesn't look similar at all.

Next, compare price of everything after the $1200 peak with the 2011/12 data you have there. Your corresponding points hit the bottom and began rising in the latter. In 2014, it continued down. This tells me that we are in a much larger cycle here that isn't really comparable to the 2010-2012 data you have without first stretching that data about 4x. I would argue that your F, G and H are more appropriately set up like this
[img]https://i.imgur.com/2Ca3IN7.png[/img

Where F and G were all of 2014 and we are still somewhere in the H. Or at best, in the I. There is also the possibility that F was the entirety of 2014 and we are in G since January this year. I don't really have an opinion on which is more likely.

RyNinDaCleM, you are trully smart! respect.

I agree with you, regarding the length of time taking longer or in other words, a larger cycle.

When i was reading OPs idea, the first thing i thought was he was right about human behaviour in herds as predictable, but also thought he was wrong in assuming it would repeat itself in the same number of days cycles. That i find, cannot happen in a case where there is growth. Growth in nature is not linear or proportional.

For example, think about children growing up, they grow at different paces at each stage of their life. Not that any growth is superior to another, but it does not take the same amount of time because at each growth level, complexity varies.

In the case of bitcoin, bitcoin today is not bitcoin of yester years - so, while growth might occur in a similar fashion, I would expect number of days to vary eg X4 or xY.

Which is why, i agree with RyNinDaCleM here when he redraws the labels to show the cycles are taking longer - similar, but longer days.

*please excuse typos. Cant be bothered

Yeah the length of time that we would take to repeat each cycle is definitely questionable... I certainly agree that we are in a new phase of Bitcoin now, and how that will affect adoption and price remains to be seen. 
Unfortunately cycles at this point are  not clear until the cycle is complete, so if we are indeed in a longer-phase cycle then it's not really possible to see it at this point until it completes.  As I said the other day, I'll take a shot at looking at the data again with a different period in mind.  (Excel is not great for varying the scale on the X-axis, so plotting that requires some thought...)

In defense of the original plot, I do also believe there is definitely a period after which people tend to "forget" what the old price was, and during which demand builds up again.  I know for myself the thought of a $20 coin seems laughable now, and I am feeling the desire to buy more coin again.  My feelings about the long slow ride down in 2014 are also not so raw now.

In the end, there are so many factors that come into play.  There is a whole new crop of Bitcoin companies becoming major players now, and the whole focus on "blockchain" now instead of "Bitcoin" also lead to thoughts that it we are in a new wave.  How this all comes together remains to be seen.

[HostSurf]

Like i said in another thread, the market manipulators are not yet.
It would make no sense to think it is done now. A turbulent month is coming for all specators.

Exactly, I don't think it's going anywhere below $350 only up from here on out. At least, that's what I like to think when it comes to bitcoin. But you never know, it's really unpredictable. I have been wrong about the price increase/decrease in the past.

[elasticband]

Watching

[hacknoid]

Yes! Some of those areas look similar, but a few to note are:
(D) In 2011, D was already making higher highs (HH's) above the B. In Elliott wave, that was a subwave of the whole rise to $31.9099. In this case, it was a 3. In 2013, it was still part of the correction, or in the best supporting argument, a subwave of a subwave, 1 of 5. Visually, it makes no HH, so it really doesn't look similar at all.

Next, compare price of everything after the $1200 peak with the 2011/12 data you have there. Your corresponding points hit the bottom and began rising in the latter. In 2014, it continued down. This tells me that we are in a much larger cycle here that isn't really comparable to the 2010-2012 data you have without first stretching that data about 4x. I would argue that your F, G and H are more appropriately set up like this


Where F and G were all of 2014 and we are still somewhere in the H. Or at best, in the I. There is also the possibility that F was the entirety of 2014 and we are in G since January this year. I don't really have an opinion on which is more likely.

OK, so I replotted the data overlaying everything basically since the November 2013 runup to ATH with about a 3x compression.



No questioin that doing this results in a very interesting graph that parallels the previous cycle much closer.  This would put us in a situation where we are on the tail end of a phase 2, however, it could mean a phase 3 that more closely follows that of cycle 1.  The net result is a possible short term period of uptrend in price, followed by a period of slow growth.  Not a bad thing.  However, in cycle 1 this phase (3) did not overtake the ATH we reached in phase 2, so if that holds again it would mean we won't get over ~US$1200 for the forseeable future.

As I stated before though, this would mean that there is no discernible cycle to be found, and while I will continue to track it, the time frame of any future peaks becomes much hard to guess at.

OTOH, if we do see a significant growth over the next month or 2, I would say the time frame has not compressed, and the original cycle periods hold.  In the above plot we are starting to generate some disparity with the previous cycle at this point using this idea, so I think we will get an idea over the next couple of months which trend fits better.

The other possibility is a period of compressed time as shown above, followed by an expansion in X bringing our timeline back to the original; something like this:



which again puts us close to back to the beginning of a new cycle.  Again, time will tell.


My final thought on this, and not working on theories of Elliott waves or TA in general, is that if there is a fractal pattern becoming evident, it would present itself such that you could view similar trends on various time scales, as I have done above.  That would mean the original theory is not invalidated, but rather additional trends become evident by changing the scale of the X-axis.  Again, we will see.

[Afrikoin]

Yes! Some of those areas look similar, but a few to note are:
(D) In 2011, D was already making higher highs (HH's) above the B. In Elliott wave, that was a subwave of the whole rise to $31.9099. In this case, it was a 3. In 2013, it was still part of the correction, or in the best supporting argument, a subwave of a subwave, 1 of 5. Visually, it makes no HH, so it really doesn't look similar at all.

Next, compare price of everything after the $1200 peak with the 2011/12 data you have there. Your corresponding points hit the bottom and began rising in the latter. In 2014, it continued down. This tells me that we are in a much larger cycle here that isn't really comparable to the 2010-2012 data you have without first stretching that data about 4x. I would argue that your F, G and H are more appropriately set up like this


Where F and G were all of 2014 and we are still somewhere in the H. Or at best, in the I. There is also the possibility that F was the entirety of 2014 and we are in G since January this year. I don't really have an opinion on which is more likely.

OK, so I replotted the data overlaying everything basically since the November 2013 runup to ATH with about a 3x compression.



No questioin that doing this results in a very interesting graph that parallels the previous cycle much closer.  This would put us in a situation where we are on the tail end of a phase 2, however, it could mean a phase 3 that more closely follows that of cycle 1.  The net result is a possible short term period of uptrend in price, followed by a period of slow growth.  Not a bad thing.  However, in cycle 1 this phase (3) did not overtake the ATH we reached in phase 2, so if that holds again it would mean we won't get over ~US$1200 for the forseeable future.

As I stated before though, this would mean that there is no discernible cycle to be found, and while I will continue to track it, the time frame of any future peaks becomes much hard to guess at.

OTOH, if we do see a significant growth over the next month or 2, I would say the time frame has not compressed, and the original cycle periods hold.  In the above plot we are starting to generate some disparity with the previous cycle at this point using this idea, so I think we will get an idea over the next couple of months which trend fits better.

The other possibility is a period of compressed time as shown above, followed by an expansion in X bringing our timeline back to the original; something like this:



which again puts us close to back to the beginning of a new cycle.  Again, time will tell.


My final thought on this, and not working on theories of Elliott waves or TA in general, is that if there is a fractal pattern becoming evident, it would present itself such that you could view similar trends on various time scales, as I have done above.  That would mean the original theory is not invalidated, but rather additional trends become evident by changing the scale of the X-axis.  Again, we will see.

Thanks for the chart hacknoid! v good work

I wonder if you factored in this [bolded]? Even if you ignore EW theory and its implcations, at least see how they differ in my chart below

Thoughts?

[jerowacik]

as already described. bitcoin have fluctuating prices. turnover rates and the amount of bitcoin is very difficult to predict.

[gerald-80]

I think we will see 500 before newyear.

[zimmah]

While these charts are very interesting and might be right I have the feeling that we will see $3000+ relatively soon.       
Probably within 10 months.

[hacknoid]

I wonder if you factored in this [bolded]? Even if you ignore EW theory and its implcations, at least see how they differ in my chart below

Thoughts?

I presume you mean the different shape in phase 1 of the two cycles?  I did notice that, and would attribute it to minor variances in the specifics, even though the trends were generally the same.  In cycle 1 the run-up occurred in two parts, with the first part being an increase from about $0.06 to about $0.25, and second bringing the price to about $0.65 to finish out the phase.  In cycle 2 there was one major run up from about $12 to finish the phase at about $120.  In both cases, it was about a 10x increase in price.

My breakdown of the trends in this thread is mainly focused on the overall trends in each phase of each cycle, since the individual price increases and ups-and-downs are too hard to predict.  Rather I point to the similarity in overall phase trend (10x increase in price, generally trending up the whole time) between start and end of phase 1. 

I could also attribute the difference to the immaturity of the market back in 2010 vs that of 2012, but as I say it's too hard to try to track individual reasons for bumps and dips.

As for what that all means this time around:

- assuming we are back in phase 1: trends would indicate a 10x increase in price between the start of the cycle back in May of this year (~$230) to when it finishes in March 2016 (so ~$2300).  Of course that would likely be after one or more peaks before then of possibly as high as $4k.

- assuming the compressed options: a lower peak value than the ATH sometime next year, with 2016 ending maybe ~$1000.  I just can't really see this being the case, however, looking at all the other positive indicators (and that we seem to be entering a strong bull market).

So, we'll have a better idea by March (or more probably, by February).

[glendall]

Bitcoin is simply not old enough to be able to declare any sort of 900 day cycles going on.

I'd say this is a fallacy, but interesting nonetheless, thanks for posting. But I think this is tantamount to a 4 year old ruminating on how there life has been a periodic and discernible cycle of positive and negative 230 day phases of good food and bad food. 

[hacknoid]

Bitcoin is simply not old enough to be able to declare any sort of 900 day cycles going on.

I'd say this is a fallacy, but interesting nonetheless, thanks for posting. But I think this is tantamount to a 4 year old ruminating on how there life has been a periodic and discernible cycle of positive and negative 230 day phases of good food and bad food. 

  Ha ha... nice one.

Can't say I completely disagree with you; there certainly is not enough evidence to say for certain whether the cycles actually exist, or whether they are simply a series of coincidences.  I do find it especially interesting that if we apply the idea of cycles, it points to quite a rosy future at least in the near term, at a time when other factors are really looking positive as well (tx rate, exchange volumes, upcoming halving, ETF(?), etc.).  So, maybe just a coincidence again, but I also believe human psychology also factors in to this, and so there may be a cycle at play behind it all.

[hunnaryb]

Bitcoin is simply not old enough to be able to declare any sort of 900 day cycles going on.

I'd say this is a fallacy, but interesting nonetheless, thanks for posting. But I think this is tantamount to a 4 year old ruminating on how there life has been a periodic and discernible cycle of positive and negative 230 day phases of good food and bad food. 

  Ha ha... nice one.

Can't say I completely disagree with you; there certainly is not enough evidence to say for certain whether the cycles actually exist, or whether they are simply a series of coincidences.  I do find it especially interesting that if we apply the idea of cycles, it points to quite a rosy future at least in the near term, at a time when other factors are really looking positive as well (tx rate, exchange volumes, upcoming halving, ETF(?), etc.).  So, maybe just a coincidence again, but I also believe human psychology also factors in to this, and so there may be a cycle at play behind it all.

Humans have a very uncanny ability to fit correlations into two separate things that have no correlation and explain it very well. Its really hard to stay unbiased when you hold a stake in an asset that you hope to profit from.

[Rizky Aditya]

Really nice graphs. I think we will be seeing the graphs steadily rising, as the demand of Bitcoin increases.

[hacknoid]

Humans have a very uncanny ability to fit correlations into two separate things that have no correlation and explain it very well. Its really hard to stay unbiased when you hold a stake in an asset that you hope to profit from.

We also have a fantastic ability to spot trends in things when they are there.

I'll fully admit I am long-term bullish, but that is based on fundamentals.  Yes, I hold some coin and hope the price goes up, but it doesn't change the past correlations I outlined.

[uki]

Bitcoin is simply not old enough to be able to declare any sort of 900 day cycles going on.

I'd say this is a fallacy, but interesting nonetheless, thanks for posting. But I think this is tantamount to a 4 year old ruminating on how there life has been a periodic and discernible cycle of positive and negative 230 day phases of good food and bad food.  

 Ha ha... nice one.

Can't say I completely disagree with you; there certainly is not enough evidence to say for certain whether the cycles actually exist, or whether they are simply a series of coincidences.  I do find it especially interesting that if we apply the idea of cycles, it points to quite a rosy future at least in the near term, at a time when other factors are really looking positive as well (tx rate, exchange volumes, upcoming halving, ETF(?), etc.).  So, maybe just a coincidence again, but I also believe human psychology also factors in to this, and so there may be a cycle at play behind it all.

I also tend to agree with what glendall said (this however does not cancel my interest in your work, hacknoid, which I already expressed earlier in this topic). I also think that it is too early to talk about seasonals if you have only 6 years of data available all together. No statistical meaning. On the other hand the cycles you plotted show some repeating patterns and do show compression between the max. peak value and the stable value in each time period, which aligns with fundamental arguments for the growth at linear pace and not at the exponential pace, as in the early days of Bitcoin. So, to some extent, that makes sense.